This paper presents a concise review of the existing digital finance research in the literature, and highlight some of the developments in digital finance around the world. The paper reached several conclusions. Firstly, it showed that digital finance has become an important part of modern finance and the major application of digital finance can be found in Fintech, embedded finance, open banking and decentralized finance, central bank digital currencies, among others. Secondly, it identified some international determinants of digital finance which includes the need for efficiency in financial services delivery, the need to achieve the United Nations sustainable development goals using existing digital technologies, the need to increase financial inclusion through digital financial inclusion and the need for efficient payments and payment settlement finality. The paper also finds that digital finance research is growing fast, and recent studies have investigated contemporary issues in digital finance that are relevant for policy and practice. Regarding the digital finance developments around the world, the paper shows that the Fintech and mobile money industries are the largest beneficiary of investments in digital finance with the total number of users of mobile money services surpassing 1 billion globally. Also, the paper predicts that the future of digital finance is to create a digital environment that permits the offering of all kinds of financial product and services that can be customized and personalized to meet the unique needs of all users on a single digital platform and without requiring any form of human assistance or intermediary. The paper then suggest some areas for future research which include the need for more research on how regulators can keep pace with emerging digital finance transformation, the need for more research on user information security and compliance, the need for more research on how to deal with bias caused by bad data, the need for more research on how to deal with algorithmic bias, and the need for more research on how to combine a risk-conscious culture with a higher risk appetite for digital finance transformation.
Purpose This paper analyzes global interest in Internet information about decentralized finance (DeFi), embedded finance (EmFi), open finance (OpFi), ocean finance (OcFi) and sustainable finance (SuFi) and the relationship among them. Design/methodology/approach The paper used a comparative methodology based on regression and correlation analyses to assess global interest in Internet information about DeFi, EmFi, OpFi, OcFi and SuFi. Findings The findings reveal that global interest in Internet information about EmFi was more popular in Asian and European countries. Global web search for Internet information about OcFi decreased during the financial crisis while global web search for Internet information about OpFi and EmFi increased during financial crisis years. Global web search for Internet information about DeFi, SuFi and EmFi increased during the pandemic years. There is a significant and positive correlation between interest in DeFi, EmFi, OcFi and SuFi. Also, there is a significant and negative correlation between interest in EmFi and interest in OpFi. The regression coefficient matrix shows that OpFi, EmFi, OcFi, DeFi and SuFi are significantly related. Originality/value To the best of the author’s knowledge, this is the first paper that analyses the association between interest in DeFi, EmFi, OpFi, OcFi and SuFi. Thus, this study addressed an important knowledge gap in the literature by exploring people’s interest in Internet information about DeFi, EmFi, OpFi, OcFi and SuFi.
As cryptocurrencies develop and circulate at greater rates, countries have appeared to consider the technology as an adoptable medium of exchange. By expanding the influence of cryptocurrencies through adoption, countries raise its impact on the global economy. This paper is the first to apply an augmented version of the gravity model to examine the effects of global cryptocurrency adoption on international trade. This empirical study involves aggregating datasets on U.S. bilateral trade flows, gravity variable statistics, and the adoption of cryptocurrencies. In application of the gravity model, regression analyses are used on the aggregated data to test the magnitude of cryptocurrencies’ impact on trade. Based on the overall findings, the variables for cryptocurrency adoption produce negative coefficients suggesting a negative correlation between the adoption of cryptocurrencies and international trade. The central tendency in the empirical evidence offers the interpretation that countries with weak institutions to promote trade are more likely to adopt cryptocurrencies resulting in a negative association between cryptocurrency adoption and trade.
O presente trabalho tem como objetivo demonstrar a origem e a formação de criptomoedas, compreendendo a natureza material dessa tecnologia em detalhes, será possível categorizá-la em um fator de incidência tributária adequado, pois apenas compreendendo o objeto da tributação, em sua essência, será possível classificá-lo com menores riscos de incorrer em erro, aplicando o imposto mais adequado ao caso específico. Consequentemente, serão apresentadas a criptomoeda e suas possíveis classificações na ordem jurídica, a fim de entendê-la como um bem ou como um ativo de mercado, ou seja, uma própria moeda. Essa classificação é fundamental para que seja possível determinar como a incidência tributária será dada na moeda virtual e, é claro, permitir a aplicação da regra da matriz tributária a ela. Além disso, nesta pesquisa será trabalhada, em um primeiro momento, a constituição existencial da criptomoeda, além de uma explicação tributária sobre os fatores de incidência que podem ser aplicados a essa tecnologia, buscando entender a essência tanto no amplo escopo jurídico e na própria tributação. Dessa forma, será necessário analisar a moeda virtual de maneira semelhante a outros ativos que possuem operações fechadas, bem como verificar o entendimento internacional sobre o assunto, uma vez que essa tecnologia é definitivamente um ativo internacional.
Matthew J. Davis, Thomas Taro Lennerfors, Daniel Tolstoy
Purpose The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive practices of multinational enterprises (MNEs) in emerging markets (EMs). Design/methodology/approach By synthesizing a technological perspective and theory on corruption, the authors examine the feasibility of blockchain for fighting corruption in MNEs’ business operations in EMs. Findings Blockchain technology is theorized to have varying mitigating effects on the rationalization, socialization and institutionalization of corruption. The authors provide propositions describing the effects and the limitations of blockchain for mitigating corruption in EMs. Social implications This paper offers a perspective for how to tackle acute business problems and social problems pronounced in international business but also prevailing elsewhere. Originality/value The study contributes to literature in international management by systematically exploring how and under what conditions blockchain can mitigate the normalization of corruption.
Marianne Bechara, Wouter Bossu, Yan Liu, Arthur Rossi
Fintech presents unique opportunities for central banks. The rapid changes in technology that are transforming the financial system will allow central banks to enhance the execution of various of their core functions, such as currency issuance and payment systems. But some aspects of fintech pose major challenges. Central banks have always been at the cutting edge of financial technology and innovation. In the past, the invention of the banknote, the processing of payments through debits and credits in book-entry accounts, and the successive transitions of interbank payment systems from the telegraph to internet protocols were all transformative innovations. Today, central banks are facing new and unprecedented challenges: distributed ledger technology, new data analytics (artificial intelligence [AI] and machine learning), and cloud computing, along with a wider spread of mobile access and increased internet speed and bandwidth. The purpose of this note is to discuss the authors’ preliminary views on how, from a legal perspective, central banks can best deal with the impact of fintech on their governance. These preliminary views are based on a review of central banks’ reaction thus far to the challenges posed by fintech to the legal foundations of their governance.
Purpose-Our health and social lives and financial markets have been significantly influenced by the Covid-19 pandemic. Even though the coronavirus' overall economic impacts are not yet known, a financial market reaction to the pandemic is observed. Studies show that the pandemic has strong impact on stock markets and cryptocurrency markets and also increases uncertainty. Cryptocurrency known as virtual money is one of the most important developments of digitalization. Cryptocurrencies discussed during the past few years and, in particular, a new investor portfolio, are highly popular. Cryptocurrency markets began to pickup with the arrival of bitcoin. These markets have started to be demand like stock markets. The purpose of this study is to establish the elements influencing individual financial investment decisions both on the cryptocurrency market and in the stock markets, with the performance of cryptocurrencies growing positively in conjunction with the pandemic in 2020. Methodology-While making financial decisions, individuals want to know how the market is carried over and they act accordingly. For this reason, both stock and crypto money markets have been examined in order to see the behaviour of individuals. The objective of this research is to establish the elements that influence individual financial investment decisions on both cryptocurrency and equity markets, since cryptocurrencies have a positive increase in performance parallel to the globally lower pandemic interest rates in 2020.In the study, it was collected with the data by survey technique. The survey examined investor behaviour in financial markets based on individual investor demographics on 428 individual investors. Findings-The study, which was collected with the participation of 428 individual investors with the survey technique, shows that the majority of crypto money users are between the ages of 25-34 according to gender, age and education level and are university graduates. When the data of the survey applied to determine the investment tendencies of individual investors are evaluated, it has been observed that the investors are mostly willing to invest in foreign exchange and cryptocurrencies arouse considerable curiosity due to their high return performance. However, participants believed that cryptocurrency market is riskier than stock markets. In our article, the level of perception about how cryptocurrencies are an investment tool is also not clear, and it has been revealed that investors primarily obtain information about this market through social media channels. Conclusion-In the financial sector, where competition is intense, financial decisions taken by investors are of great importance. Increased pandemic risk factor has led to ambiguities in investment decision-making. Global uncertainty continues despite the development of the vaccine. Corruption in cryptocurrency exchange, often mentioned in recent days, led individuals to research and to learn more about themselves in this area, who are investing in this industry or planing to do so. Our survey on investor behaviour in financial markets, which was carried out with the participation of 428 people over the social platform, was also prepared to be more on crypto money. According to the survey, developments regarding cryptocurrencies showed that the State had to regulate. The recent news about corruption reveals that cryptocurrency markets will continue to be precepted negatively for some time, but it shows that incidents are rapidly forgotten.
The emergence of digital currencies such as Bitcoin and the underlying blockchain and distribution ledger technology have attracted significant attention. These developments have raised the possibility of considerable impacts on the financial system and perhaps the wider economy. This paper addresses the question of whether a central bank should issue digital currency that could be used by the general public. It begins by discussing the possible motivations for a central bank to issue a digital currency. The paper then sets out a benchmark central bank digital currency (CBDC) with features that are similar to cash. The implications of such a digital currency are explored, focusing on central bank seigniorage, monetary policy, the banking system and financial stability, and payments. Finally, a CBDC that differs from the benchmark digital currency in a significant way is considered.
Alim Al Ayub Ahmed, Harish Paruchuri, Siddhartha Vadlamudi, Apoorva Ganapathy
Digital finance is assuming a significant part in the arrangement of financial services all over the world. Fast growth with digitalization, data analysis, and computing capacities allows for a whole new scope of financial services and transactions. This financial development empowered by digital financial technology (Fintech) has pulled in a ton of attention, as it could offer some potential for economic growth and development. As a part of the Fintech environment, cryptography has started to grow quickly and digital assets are acquiring in favorability among financial bankers and investors. Human behavior as they engage with financial activities is personally associated with the noticed market elements. However, with many existing theories and studies on the fundamental motivations of the conduct of people in financial frameworks, there is still restricted experimental derivation of the behavioral conduct of the financial agents from a definite market analysis. Cryptocurrency technology has given a map to this analysis with its voluminous data and its transparency of financial transactions. It has empowered us to perform inference on the personal conduct standards of users in the market, which we analyze in the bitcoin and ethereum cryptocurrency markets. In our study, we initially decide different properties of the cryptography users by complex network analysis. Financial cryptography is a difficult subject that necessitates abilities from a variety of seemingly unrelated fields. There is a serious risk that attempts to establish Financial Cryptography frameworks would simplify or omit key disciplines because they are caught between central banking and cryptography. This paper discusses research that attempts to limit the scope of Financial Cryptography. This model should assist the project, administrative, and requirements personnel by classifying each discipline into a seven-layer model of basic nature, where the link between each adjoining layer is evident. While this model is shown as effective, all models have cutoff points. This one does not present a design system or a protocol agenda. Furthermore, given the model's initial adaptation and the field, it should be viewed as a suggestion of complexity rather than a definitive approach.
Bitcoin, son yüzyılın en meydan okuyan girişim örneklerindendir. Bu doğrultuda Bitcoin’e olan ilgi de hem kripto borsalarda hem de akademik literatürde çokça yer almaktadır. Genelde yapılan çalışmalarda, Bitcoin fiyatı üzerinde etkili olabileceği düşünülen finansal varlık rasyoları dikkate alınmaktadır. Bu çalışmada ise gazete ve medya haberlerinde Para Politikası Belirsizliği (MPU) ile ilgili yer alan haberler dikkate alınarak oluşturulan endeksler kullanılmıştır.Bu çalışmada, Ağustos 2010-Ağustos 2020 dönemlerinde Bitcoin fiyatı ile ABD ve Japonya Para Politikası Belirsizliği (MPU) endeksleri arasında aylık veriler kullanılarak, Hatemi-J (2012) asimetrik nedensellik testi çalıştırılmıştır. Çalışmanın sonunda ABD ve Japonya para politikası belirsizliği ile Bitcoin fiyatları arasında ne tek yönlü ne de çift bir nedensellik ilişkisine rastlanmamıştır. Bu çalışmada yer alan veriler ve değişkenler göz önüne alındığında, ABD ve Japon para politikası belirsizliği ile ilgili haberler ile Bitcoin fiyatları arasında bir ilişki olmadığı sonucuna varılmıştır
This paper studies to what extent the cost of operating a proof-of-work\nblockchain is intrinsically linked to the cost of preventing attacks, and to\nwhat extent the underlying digital ledger security budgets are correlated with\nthe cryptocurrency market outcomes. We theoretically derive an equilibrium\nrelationship between the cryptocurrency price, mining rewards and mining costs,\nand blockchain security outcomes. Using daily crypto market data for 2014-2021\nand employing the autoregressive distributed lag approach - that allows\ntreating all the relevant moments of the blockchain series as potentially\nendogenous - we provide empirical evidence of cryptocurrency price and mining\nrewards indeed being intrinsically linked to blockchain security outcomes.\n
The use of digital money creates not only threats, but also opportunities for economic development, but in Latvia and the Baltic countries, they are not sufficiently researched and not widely spread. The paper aims to identify the reasons for the lagging behind of the Baltic countries and Latvia in the development of the cryptocurrency market and to develop recommendations for improving its regulation and functioning. Based on the methods of cross-country, statistical and sociological analysis, the national factors of differences in the functioning and regulation of cryptocurrencies in Latvia, Estonia, and Lithuania have been identified and the risks of its use for illegal activities have been assessed. It is shown that the role of cryptocurrencies in the financial markets of the Baltic States is determined by the degree of their use for payments and investments, which depends on their recognition by the state and investors. It has been revealed that the definition of the concept of cryptocurrency in the EU and the Baltic countries, primarily in the money laundering and terrorist financing (ML/TF) directives, does not stimulate the use of its positive features. A correlation between the restrained attitude towards cryptocurrencies in Latvia and its large-scale business relations with the CIS countries with a higher proportion of shadow economy, caused by the peculiarities of its history and geographical location, has been revealed. The Latvian banking system, under the influence of international regulators, has become less appropriate for operations of non-residents from the East, which increases the risk of using cryptocurrency for ML/FT purposes. The factors of motivation, advantages and difficulties of the businessmen of the Baltic countries they face when dealing with cryptocurrency have been identified, and a discrepancy in the regulation of taxation of transactions with cryptocurrency and the respective activities in Latvia has been revealed. Recommendations are given to the state and private investors pertaining to the integration of cryptocurrencies into the economic space, the implementation of which will contribute to the development of the digital economy and growth of wealth of Latvian residents. The results of the study can be used to improve government regulation and private investments in the cryptocurrency market, as well as in the study and further research of this problem
While the benefits of open-source innovations such as the availability of developers with diverse skill sets and accelerated innovation are well-documented, such open boundaries also facilitate copying (forking) the codebase and creating new substitutes, which may compete with the parents for developer attention. Given that the movement of developers across projects is made easier due to lower friction in open innovation models, we study how substitutes created by copying the codebase of a product impact developers’ attention and subsequent innovation using the context of cryptocurrencies. Using a data set on 23 cryptocurrencies from which 17 forked products were created between 2011 and 2018, we find that in spite of lower friction in this setting, such events have a positive attention spillover effect, which attracts new developers and increases participation among the existing developers. Our study provides managerial insights for firms assessing open models for product development.
Our innovative collaboration of our research work is to study and test the effects of exchange rates/USD and economic factors such as financial openness (Kopen), inflation rate, internet penetration and rate of economic growth on the bitcoin price of developing countries, during 2010-2017. The rise of the new phenomena of crypto currency in the world raises questions about the importance of bitcoin prices compared to the exchange rate and financial openness. Using panel data, we show that the exchange rate has a positive and statistically significant impact on the price of bitcoin and financial openness has exerted a negative and significant effect on bitcoin price. Specifically, we determine the causal relationship between the bitcoin price and its factors using Granger causality test.
Decentralized Finance (DeFi) is transforming the financial services industry through blockchain technology, smart contracts, and decentralized protocols. By eliminating intermediaries such as banks and brokers, DeFi enables transparent, efficient, and accessible financial transactions. The ecosystem includes decentralized exchanges, lending and borrowing platforms, liquidity pools, yield farming, and tokenized assets, which have significantly influenced global financial markets.This study examines the structure of the DeFi ecosystem and its market implications using a conceptual and analytical approach. The findings highlight key benefits such as improved financial inclusion, reduced transaction costs, enhanced transparency, faster transaction processing, and increased financial innovation. Smart contracts automate financial operations, while decentralized exchanges and liquidity pools create new models for asset trading and liquidity provision. Despite these advantages, DeFi faces several challenges, including cryptocurrency price volatility, smart contract vulnerabilities, cybersecurity threats, governance issues, and regulatory uncertainty. The interconnected nature of DeFi protocols may also create systemic risks that can affect the broader ecosystem. The study concludes that DeFi represents a major advancement in financial technology by bridging traditional finance and blockchain-based systems. However, sustainable growth requires stronger security mechanisms, transparent governance frameworks, and adaptive regulatory policies. Hybrid models combining decentralized innovation with effective regulation are likely to shape the future of financial services.
The development of cryptocurrency as a means of exchange without legal backing and invisibility of the identity of operators has posed peculiar challenges such as illicit financial flow and terrorism amongst others, to the country. This study, therefore, sought to examine the effect of cryptocurrency on the Nigerian economy. The study was hinged on social exchange theory. Secondary data were obtained from the CBN statistical bulletin and Global Financial Integrity Report for a period of six years from 2013 to 2018. The data were analyzed using a simple regression model. The result shows that R is 5.8% which means that there is a low positive relationship between cryptocurrency and the level of economic development in Nigeria. It further shows an adjusted R square of -24.6 which depicts that cryptocurrency has a low inverse effect on the level of economic development in Nigeria. In conclusion, the computed p-value of 0.913 which is higher than the set p-value of 0.05 shows that cryptocurrency does not have a significant effect on the level of economic development in Nigeria. Hence, it is recommended that, in order to sustain economic development from the activities of cryptocurrency in Nigeria, the Central Bank of Nigeria needs to ensure that laws and mechanisms are put in place to adequately capture the activities of cryptocurrency in the country.